Lender Approval Made Easy With 3 Simple Steps

There are more loan financing options than ever before. Between hard money, private money and personal capital it is easy to forget about traditional lender financing.  Even though banks have gotten a bad rap over the years they are still a very attractive financing option.  The near record low interest rates alone make them a worth a look.  The biggest knocks on bank loans have been the massive amount of paperwork required and the length of time to close.  Banks have recently taken measures to cure these problems.  The application and submission processes have been much more streamlined which has led to quicker closings.  The loan process may have been tweaked but the same basic guidelines are in place.  Here are a few items needed for approval on every bank loan.

1. Strong Credit Scores. Investment loans have some of the most stringent guidelines of any loan program. Due to the fact they are not a primary residence they are considered a much greater risk factor. Because of this they require many items that a primary residence loan does not. One of the first items required is a strong credit score. The floor on investment loans is much higher than any other loan type. Most banks require a minimum 720 score. In terms of credit score rating a 720 is considered excellent. You can pay everything on time and very easily have a score below 720. Not only do you need timely payments but low balances on almost every account. Your 720 score has to be the middle of the three reporting credit bureaus (Experian, Equifax & Transunion). Simply having one of these three over 720 may not be enough to move forward. You can have significant down payment and low debt but if your credit scores are excellent you may have trouble getting approved.

2. High Down Payment. There has been an increase in the amount of loan programs for buyers with limited down payment. FHA and certain conventional loans offer programs as low as 3% down. Unfortunately these are for primary residence borrowers only. With an investment property the down payment is much higher. Depending on the exact credit score you will need anywhere from 20-30% down. Unlike with other loans these funds are required to come from only the borrower’s accounts. No gift funds or non-borrower contributions are allowed. Another potential problem is that the down payment needs to be in an existing account for at least 60 days. This “seasoning” of the funds is done so that no outside money can be used to contribute to the transaction. Any transfers to accounts need to be supported with full statements showing funds going to and from accounts. Documenting of funds can be a tricky process often times filled with multiple statements of paperwork. On these statements if there are any large deposits or withdrawals they will be questioned. Simply having the down payment funds is not enough to move forward. With an investment loan they have to be seasoned and every dollar explained and documented.

3. Low Debt To Income. The third hurdle for loan approval is the debt to income ratio. You may think that having strong income alone is enough to grant loan approval. Strong income is just a part of the process. To calculate the debt to income ratio lenders add up all of the minimum monthly payments listed on the credit score. They will add this number to the proposed monthly housing payment. This is the total debt number. From there they will take the annual gross income and divide that number by twelve. With this they divide your debt by your income. With an investment loan this number typically needs to be around 40%. Calculating income comes with a few hurdles. The first is that you may not document all of the income you receive. Secondly the lender will only use 75% of your total rental income. Even if you have sufficient income to support the loan your debt to income needs to fall under this number. Long gone are the stated income and low documentation loan programs. There may be a lender or two that still does them but the interest rates are nowhere near traditional bank levels. Before you start your loan application you should get a copy of your credit report and see where your monthly liabilities are.

If you have received a pre-qualification letter and loan approval is not an issue you need to consider the benefits. The first is that banks offer by far the lowest monthly interest rates.  If you are considering a hard money loan you can expect interest rates two or even three times as high.  You also need to think about how long you plan on holding the property for.  If the purchase is a quick rehab interest rates may not be as big of a factor.  If it is a rental property that you want to keep in your portfolio for years a 30 year fixed mortgage is the perfect option.  Think about how quickly you need to close and what hurdles you may have to deal with.  If you are looking to close in a short timeframe a bank loan may not make the most sense.  The first step is to talk to your local lender or mortgage broker to see if you are qualified.  From there take each deal on a case by case basis to determine the best financing option.  You never know when you will need, or want, a bank loan.


Building And Developing Your Wholesale Buyers List

Building and developing a strong buyer list is one of the keys for any new wholesaler. You can have a great deal but unless it sells it doesn’t make a difference.  Like any other aspect of the real estate business strength is in numbers.  The wider your net is the better chance you have of attracting a buyer.  Fortunately, it is easier than ever to build your list.  There are a few simple things you can do generate interest.  From there you need to turn that interest into actual deals.  Wholesaling deals are a great way to generate income but you need to have a strong buyers list.  Here are a few ways to build and develop your list.


  • Personal Contacts. When looking to build your list the very first thing you should do is look at your personal contacts. You may be surprised at just how many people you know have an interest in real estate. Start by making a list of everyone you know. Be sure to include any friends, family, co-workers, ex-coworkers and anyone you know. There is no reason to leave anyone out. You truly have no idea who may have an interest in real estate or know someone who does. Take your list and email every address available. The email should state that you have recently begun investing in real estate and may have access to deals in the area. If they want more information to give you an email or call back. It really doesn’t need to be much more elaborate than that. You will get your share of skeptical emails but the handful that do respond are the ones you should focus on.
  • Professional Contacts. If you have been in the real estate business for any time you should reach out to your contacts. Every real estate agent, attorney, mortgage broker and fellow investor probably knows someone that buys real estate. Just as you did with your personal contacts start by sending them an email. With this list you should be prepared to answer more specific questions regarding locations and price points. There may be a question or two of how you find your deals or what you may be looking for. It is important to track every response that gets back to you.
  • Bandit Signs. There are other ways to build your buyers list other than the people you know. Every bandit sign that says “we buy houses” is a potential opportunity. Take the time to call each bandit sign you see. There will be a few calls that will be annoyed that you called but for the most part the response will be positive. You aren’t selling anything. All you are doing is giving them an opportunity to potentially get a great deal on a property. If they want to take it fine, if not there are other buyers out there.
  • Real Estate Websites. Between Craigslist, Trulia and Postlets you can find a handful of potential buyers. On Craigslist alone you should be able to add to your buyers list. Every post from a seller could be from a potential buyer. Take a few minutes every day and reach out to these posts. The same is the case with rental listings. You never know which rental property owner is also an active buyer. The only way is to find out. The worst thing that they can say is no.


  • Track Responses. Getting responses from your calls or emails is great but you need to do something with these leads. The best way to quickly sell a wholesale deal is by having motivated buyers. The only way to gauge motivation is by tracking your results. Everyone that responds should be sent a small questionaire asking questions about price points, locations and types of properties they are looking for. You don’t have to make this too long but you do want to get an idea of what they may be looking for. The more you know about your buyers tastes the easier it is to find deals they may be looking for.
  • Keep In Touch. Your communication shouldn’t stop after your initial email. Once you build your list you should keep in touch every few weeks. A monthly newsletter is a nice way to keep your name on the mind of potential buyers. Anyone that doesn’t want to remain on should have the option of opting out. Even if there is no response at all you should continue sending these out. The odds are that most recipients are reading your emails but may not have an interest in buying at the current moment. The longer you keep with it the more interested they will be when they are ready.
  • Set A Meeting. You can’t expect buyers to work with you unless they have a good idea of what they are getting into. A meeting will often put them at ease. You don’t need to have a fancy dinner to get your point across. Something as simple as a cup of coffee can be just as effective. What you eat is not as important as the information you provide. The more transparent you are the more comfortable they will be. If there are questions you should ask if they want to meet rather than answering them over the internet. A face to face meeting is a great way to make a prospective buyer feel comfortable.

A strong buyers list will make your job as a wholesaler as easy as possible. Developing this list is usually a cultivation of actions over time.  By doing something every day to develop your list you will slowly see the results.

– See more at: http://www.cthomesllc.com/2016/04/building-and-developing-your-wholesale-buyers-list/#sthash.itPJu4N1.dpuf

8 Professionals You Need On Your Investing Team

In real estate you are only as good as your weakest link. You can have all the motivation in the world but you need a good team around you to make it happen.  Even though you may invest individually you need the support of the people around you.  Your team consists of many individuals that either help to find deals, evaluates them or protects you every step of the way.  You should take your time to find the professionals that are the best fit for you and your goals.  Once they are in place you should go out of your way to treat them like gold.  Whether you know it or not they all play a big hand in your success.  Here are eight professionals every investor needs on their team.

  • Real Estate Agent.   A good real estate agent does more than to just help find potential deals. They have a real understanding of what you want and where you want it. This goes a long way to streamlining your business and making it as efficient as possible. They also influence what number you list your property and how quickly they sell.   You can do everything right with a rehab but unless it sells quickly it doesn’t matter. A good real estate agent should be one of the first team members you have on your team.
  • Inspector. The inspection is one of the final steps you take before you close a deal. You need to develop a relationship with an inspector that you trust. The inspection process is designed to inform the buyer of any defects with the property. A good inspector may go the extra mile and search for problems that may not be available on the surface. Finding an unexpected item can save you thousands of dollars or help get away from a bad property.
  • Builder. You never know when you will need the assistance of a good builder. From time to time you may come across an opportunity to purchase land or build on an existing plot. There is a big difference between managing a rehab and building a property from the ground up. The amount of paperwork and licensing alone can be a real issue. Having a builder that delivers quality work that you can trust can open the door to opportunities you may have never thought about.
  • Mortgage Broker/Lender. Having a mortgage broker on your team can serve a number of valuable purposes. The first is they can often be a great source for new deals. They deal with dozens of applicants every week that may not fit lending guidelines. Their best option is often to sell as quickly as possible. The second purpose is that they can prequalify any potential buyers you have on properties you are selling. Instead of wasting time on offers that will never close you can be more selective and choose the best possible offer.
    • Property Manager. One of the best ways to generate short and long term income is through rental properties. As great as they are they can often be difficult to manage. Instead of self-managing your investments you can utilize a professional property manager. A good property manager frees up time so you can focus on other areas of your business. They will handle maintenance requests, collect rent, review leases and keep an eye on your property. Instead of running to the property every time there is a call a property manager can make your life much easier.
    • Attorney. Every real estate investor can use the council of a good attorney. Not only does an attorney provide advice but they also protect you and your business. They are the ones that review the contract and make sure you are protected. They deal with sellers to push your deal to closing. They also advise best entity protection for your business. A good attorney is the last line of defense on many deals and will offer piece of mind to help you sleep at night.
  • Accountant. There is more to being a good investor than just closing deals. You need to be able to monitor your profits and let your money work for you. Here is where a good accountant is important. Many people only think about their accountant come tax time. While they are certainly important in preparing taxes they also help manage funds year round.
  • Marketing Manager. Things have changed in business in recent years. There has been a dramatic shift in how businesses are marketed. You don’t necessarily need to be a tech expert but you should have someone on your team who is. Having someone help with your website or with social media posts can prove invaluable. A large majority of sellers are turning to the internet to start their search. You need to have a team member that will help keep up with the changing technology.

Every networking meeting you attend is an opportunity to grow your team. You should follow up with every business card you receive.  You really never know when you will need to add someone new to your team.  Your team members often go a long way in determining your success.  Investing in real estate is difficult enough by yourself.  Surround yourself with the best possible team.

– See more at: http://www.cthomesllc.com/2016/03/8-professionals-you-need-on-your-investing-team/#sthash.XzleMnNW.dpuf

7 Inexpensive Ways To Find Sellers

The best real estate investors understand the importance of a keeping a full pipeline. Closing a deal today is great only if you can find ways to build on that momentum.  In almost any market there are motivated sellers.  The key is to constantly strive for ways to find them.  One of the misconceptions in the real estate business is that you need to spend thousands of dollars on marketing.  Pricey direct mail campaigns can be effective but there are other less expensive alternatives available.  Given these price points you can afford to try a combination of some or even all of them.  Here are seven inexpensive ways to find sellers.

  • Expired MLS Listings. One of the best ways to build your business is with a real estate agent. A quality real estate agent has multiple outlets for finding sellers. Most investors use their realtor to help with foreclosure and REO listings. These deals can be profitable but they are also very popular. An alternative to this is expired MLS listings. There are listings that have been on the market typically for several months. After anywhere from 90 to 120 days the listing will expire and either need to be renewed or is taken off the market. These sellers may have mispriced their property or were simply looking to gauge interest. Either way they may be frustrated and looking for any offer to get the ball rolling. You never know what you will get when reaching out to expired MLS listings.
  • Classified Newspaper Ads. There is a large segment of people who grew up relying on newspapers as their prime source of information. While newspaper popularity is down they still reach thousands of eyeballs every day. The classified section in your local newspaper has multiple options for finding sellers. The first is to reach out to all rental listings. Focus on ones with out of market area codes. An out of state landlords may be frustrated with the process and interested in selling. The classified section also has homeowners or investors who are looking to sell. You may talk to a few disgruntled owners but all it takes is one who is willing to make a deal.
  • Email Contact Lists. Every email you receive from a business card or personal contact should be put in a separate file. It is important to stay updated and relevant with these contacts. Every few weeks or so you should send out an email just to keep in touch. This email could include a newsletter or something else of relevance but the point is to keep you on their mind. You never know when one of your contacts may know someone who is interested in selling. The chance of closing a referral lead is much greater than any other type of lead you will generate. Every week you should look to add someone else to your file. The more people you can reach the greater the odds of finding a deal.
  • Mortgage Brokers. Mortgage brokers are a great source for motivated sellers. The average mortgage broker comes in contact with dozens of applications every week looking to either refinance or purchase. Some of these borrowers may not fit lender guidelines and selling is their best option. Since they know that their options are limited they are more likely to sell at a discounted number. On the flip side you can share any homeowner information on properties that you are selling. Every investor should have at least one solid mortgage broker as a contact.
  • Bandit Signs. Bandit signs are the small signs you see on various front yards. This being an election year they are especially prevalent. Instead of promoting your favorite politician you can market your business. Your bandit sign and read anything from “we buy houses” to “quick, cash closings.” Whatever slogan you want to use can be placed on these signs. You can typically purchase hundreds of these signs for less than the cost of a good dinner. These can be placed on any properties you current own or in select locations with town approval.
  • FSBOs. FSBO is the acronym for “for sale by owner”. As the name indicates these are owners who are selling their property without the assistance of a real estate agent. They may be looking to save money on real estate commission or simply feel they can do as good a job. Many FSBO properties try testing the market at an inflated market price only to come down after several months. With the inactivity they often entertain almost any offer that comes in. Working with fsbos often takes several months but the payoff could be receiving a great deal.
  • Driving For Dollars. Finding deals is often as easy as driving for dollars. You can spend a few hours every day driving an area of the market. Make note of any distressed looking properties you see. You can often find the owner through a tax search at town hall. From there reach out to them explaining that you buy investment properties in the area. They may have thought about selling but aren’t sure the easiest way to go about it. Driving for dollars just a few hours a day will often yield a handful of live leads.

Marketing and lead generation is a numbers game. The more leads you have the better chance you have of closing deals.  If you are looking to build your pipeline start by focusing on these seven inexpensive ways to find sellers.


The Perfect Lease From Beginning To End

As a rental property owner you are only as good as your tenants. You can do everything right with the property but if your tenants are poor it won’t make a difference.  Dealing with tenants is more than just handing them a key and waiting for checks every month.  They should fully understand expectations and guidelines but are given enough space to enjoy the property.  At the end of the lease they should either want to renew or give a glowing review of you and the property.  To achieve this there are a few simple steps you need to consider during the course of the lease.  Here are some things every landlord should do as they strive for the perfect lease.

  • Lease/Walk Through. The relationship with your tenant starts with the initial conversation. Every applicant that reaches out to you is a prospective tenant. You should treat everyone that calls as if they are going to be living in your property for the next nine months. After you receive their application and commit to renting you need to review the lease. This should be sent through email and reviewed at the property. It is very important that you take time and go through your lease line by line. This can be tedious but will cut off any potential questions before they happen. Also when you are at the property you should walk the grounds and take pictures to note the condition before they move in. This may come in handy at the end of the lease.
  • Set Firm Guidelines. As you review the lease you need to make note of any items that are of particular importance to you. If you are adamant about keeping the property pet or smoke free you need to reiterate this. You may also have concerns about parking or the number of tenants allowed in the property. Whatever is important you need to make this crystal clear. You also need to attach a punishment for breaking these rules. These could range from a small penalty for a late payment to eviction. Let these guidelines and penalties be known up front so there is no misunderstanding down the road.
  • Scheduled Periodic Checkups. Most leases contain language that allows the owner to enter the property at any time. Just because it is allowed doesn’t mean you should do it. In every lease you should schedule a walk through every five months or so. Give your tenant at least two weeks’ notice. The point of this isn’t to check on your tenants but to make sure that everything in your property is running properly. Your tenant may not tell you that the downstairs toilet runs from time to time or back door doesn’t close all the way. These are the little things that if caught early enough could save you hundreds of dollars. If you explain it to your tenant this way they won’t think you are checking up on them.
  • 60 Day End Of Lease Notice. At your lease hits the home stretch you need to think about the end. Start by giving your tenant at least 60 days’ notice. As obvious as it may seem to you your tenant may not know when the end of their lease is. Giving 60 days’ notice serves a few purposes. The first thing is that it gives your tenant a chance to renew their current lease. If you have a good tenant there is no reason to look anywhere else. Ask them if they have any interest in staying for an additional term. If not a 60 day notice gives them a heads up to begin preparing themselves, and the property, for move out day.
  • 30 Day Notice. If a 60 day notice is a wakeup call a 30 day notice is an alarm. With your 30 day notice you should supply a detailed list of items and expectations needed for move out day. These should be on the lease but need to be reiterated again. As simple as it sounds you want the property in the same condition as they found it. There will always be normal wear and tear that is expected but you don’t to pay to have the property restored. By giving a detailed list, along with photos, of the expected condition you leave no doubt as to what you want done.
  • Walk Through/Key Exchange. On the lease move out day you will walk the property with your tenant and exchange keys. Your tenant will probably ask for their security deposit on the spot. It is important that you tell your tenant if they want to be with you at the property that you are going to be a few hours. This is your chance to try all appliances and examine the property. Once you give back the security it is too late if you find something after the fact. You shouldn’t nickel and dime your tenant but you don’t want to have to pay to repair an item either. If you are satisfied with condition you can cut a check on the spot but you have up to 30 days after the lease to do so. Keep in mind that positive word of mouth is important and you never know who your tenant may know.

The key to a successful lease is to respond as quickly as possible to whatever comes your way. By staying on top of these six areas alone you greatly increase your chances.

Finding New Buildings in the Dust of the Old

With the continued and growing emphasis on sustainability in construction we could be on the verge of a radical shift in how we think about the current stock of buildings. The time may be coming when we stop planning for building replacement, and instead plan for building reuse. That in turn would significantly change the roles of designers and builders.

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How To Build A Construction Plan

Learn how to market your contractor business professionally. In depth knowledge of attracting clients with online marketing strategies and deep thinking about who you want your clients to be.

The housing industry has proceeded at a red-hot pace for several years running. An all-time record was set in 1998, when 886,000 new-site single family homes were sold. That represented a 10% gain from the robust total of 804,000 homes sold in 1997, and an 8.1% rise from the prior record of 819,000 units in 1977. Single-family housing construction accounted for $48 million of the total $125 million generated in the industry.

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Construction Honored with AGC Builders

Last night, Construction was honored to accept a Best Builders Award from the Associated General Contractors of Vermont for the construction of the $31.3 million Vermont Public Health Laboratory. There is so much to celebrate about this project – from both a construction and community perspective – and it was so gratifying to have that impact formally recognized in the contracting community.

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